Considerations in Filing for an LLC

Setting up an LLC and other states has become a popular option for many small business owners because of the many benefits it offers. A limited liability company puts together the advantages of a sole proprietorship, a partnership, and a corporation all in one business entity. This means compete control, tax benefits, and limited liability. The interest in LLCs continues to grow as more and more business owners are able to realize its advantages over other business types.

Before starting an LLC, there are some considerations that should be kept in mind. Taking note of these considerations will ensure that the processing of its registration with the appropriate government agencies will go faster and smoother. When the paperwork is completed properly, there will be no questions as to the LLC's legality.

First, the members filing for LLC should decide on the name of the business. This should meet the standards in LLC names set by the state government. To know the availability and aptness of the name, the business name database can be utilized for verification. Also, the name for an LLC can be reserved for four months by filing an application as well.

The next step is submitting the LLC's Articles of Organization. These articles should include all the necessary information about the LLC such as the name and address of LLC, its registered agent, and its duration. Also, how the LLC will be managed and who will manage the LLC should be stated in the Articles of Organization. Under the law, these are all filed with the office of the Secretary of State through mail.

The Operating Agreement should be processed after the filing of the Articles of Organization. Though this is not required by the state's government, it is still highly advisable. This is essential to define each member's responsibilities and liabilities. With Operating Agreement, the members can be protected from being personally liable if ever the business becomes bankrupt. Aside from the statement of responsibilities and liabilities, other information can be included as well. This includes the business nature, concept, and mission statement.

Lastly, business permits and licenses should be acquired. These vary depending on state laws. The business licenses that need to be obtained depend on the nature of the business and its location. Aside from that, the LLC businesses are all required to submit annual reports. This is also submitted to the Secretary of State on the designated date and can be done through mail or online filing. Knowing about all these requirements will help business owners keep track of their filing schedules to ensure that they are always compliant with all the government's documentation and reportorial requirements.

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Can Anyone Else Revoke a Power of Attorney I Have Granted?

Can anyone else revoke a power of attorney I have granted?

How to Choose the Right Business Structure

By reviewing the pros and cons of these four common business structures, you can determine which one will benefit you most.

Medical Power of Attorney

A Medical Power of Attorney gives specific instructions, prepared in advance, that are intended to direct medical care for an individual if he or she becomes unable to do so in the future. Plainly speaking, a Medical Power of Attorney is made in anticipation of a medical emergency. If you are in an accident or suffer a disease or disorder that may leave you incapable of making a sound medical decision, a Medical Power of Attorney permits you to choose in advance who will represent and enforce your interests. The person authorizing the other to act on his behalf is the "principal" and the one authorized to act is the "agent".

A Medical Power of Attorney should be given to someone whom you trust unreservedly; this is an individual who will be making decisions for you when you are incapacitated, even if you are not on life support or terminally ill. However, an agent does not have the authority to act until the principal's attending physician certifies in writing that the principal is incompetent.

A Medical Power of Attorney is not legally effective unless the principal signs a disclosure statement that he or she has read and understood the contents before signing the document. If the principal is physically unable to sign, another person may sign the document in his or her presence and at his or her directive. Two qualified witnesses, who are competent adults, must witness the procedure. At least one of them must not be related to the principal, the principal's attending physician or the attending physician's employee, entitled to a part of the principal's estate, an individual who has a claim against the principal's estate, or an officer, director, partner or business office employee of the healthcare facility.

An individual may revoke the Medical Power of Attorney by notifying either the agent or the principal's health care provider of his or her intent to revoke the document. This revocation will take place regardless of the principal's capability to make sound medical judgments. Further, if the principal executes a later Medical Power of Attorney, then all prior ones are revoked. If the principal designates his or her spouse to be the agent, a divorce revokes the Medical Power of Attorney.
An agent, acting in good faith, will not incur criminal or civil liability for a medical decision made under a Medical Power of Attorney.

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By The People Fairfield CA

Rene talks about how By The People in Fairfield can help people with legal matters in an inexpensive way. See more at http://www.bythepeopleca.com

Limited Liability Company (LLC) - Definition and Explanation

A Limited Liability Company (LLC) is a very flexible form of business structure that combines elements of the typical corporation and partnership structures. By forming an LLC, you create a legal entity that provides limited liability to its owners. Often, these are incorrectly called a Limited Liability Corporation instead of Limited Liability Company. It is truly a hybrid business entity that can contain elements and/or characteristics of corporations, partnerships and even sole proprietorships, depending on how many owners are involved in the Limited Liability Company. An LLC, even though it is a business entity, is actually a type of unincorporated business and is not a corporation. The main characteristic that an LLC shares with a corporation is the limited liability protection that they both offer. The main characteristic that an LLC shares with a partnership is the pass-through income taxation that they both offer. It is, however, much more flexible than a corporation and is very well suited to single owner businesses.

You should understand that neither limited liability companies nor corporations always protect owners from liability. The legal system in the United States does allow a court system to pierce the corporate veil of an LLC if some type of fraud or misrepresentation is involved or in a situation where the owner uses the company as an 'alter ego'.

Flexibility and Default Rules

All LLC legal statutes include a phrase similar to "unless otherwise provided for in the operating agreement" and this allows for the flexibility the members of an LLC have in deciding how their LLC will be governed. Some statutes provide default rules for the governance of an LLC that are in effect unless an operating agreement has been adopted.

Income Taxation

For the purposes of the Internal Revenue Service and Federal income tax purposes, LLCs are treated by default as a pass-through entity. If the limited liability company has only one member or owner, it is automatically considered a "disregarded entity" for tax purposes and the owner is allowed to report the income from the LLC on his or her own personal tax return as a Schedule C. If the LLC has multiple owners, it is treated as a partnership and must file IRS form 1065. Partners will then receive a K-1 for their share of losses or income so they can report it on their tax return.

LLCs also have the option of electing to be taxed as a corporation, simply by filing IRS Form 8832. Then, they will be treated the same way as a regular C Corporation or they can elect to be treated as an S-Corporation. If it is treated as a C-Corporation, the entity's income is taxed before any dividends or distributions are given to the members and then taxation of the dividends or distributions will be taxed as income for the members. Some analysts have recommended the LLC taxed as an S-Corp as the best possible small business structure, because it combines the flexibility and simplicity of the LLC with the self-employment tax savings of the S-Corp.

Advantages

Here are the attributes of a limited liability company that are most widely viewed as advantages:

•Check the box taxation. LLCs have the option of being taxed as a sole proprietor, partnership, S-Corporation or C-Corporation, which provides a great deal of flexibility.

•Limited Liability. The owners of an LLC, who are known as members, are generally protected from some or all liability related to the acts and debts of the LLC, depending on state laws where the LLC formation took place.

•Administrative paperwork and record keeping is significantly simplified compared to a corporation.

•Pass-through taxation is automatic, unless the LLC elects to be taxed as a C-Corporation.

•Profits are taxed at the member's personal level, rather than at the LLC level by simply using the default tax classification given by the IRS.

•In most states, LLCs are generally treated as being a totally separate entity from the LLCs owners.

•LLC's can generally be set up with only one person being involved.

•An LLC can assign its membership interests, and the economic benefits of those interests can then be separated and assigned, which provides the economic benefit of distributing the profit and losses of the company, like in a partnership, without actually transferring the title to the interest.

•Except in cases where the LLC has adopted a corporate taxation structure, the income from the LLC will generally remain in the hands of its members

•By adopting an operating agreement, members can generally establish their own rules for governance and protective provisions for the members.

Disadvantages

Here are the attributes of a limited liability company that are most widely viewed as disadvantages:

•Most states do not have a statutory requirement for an LLC to have an operating agreement, however, if you are a member of a multiple member LLC, you may run into problems if you don't have an operating agreement, since most states do not dictate the governance and protective provision for the members of an LLC as they would with a regular corporation.

•If a member decides to sell his interest in a limited liability company, and if the ownership of the LLC is vested in multiple members, it is not as straight forward as with a corporation since the LLC cannot issue and sell stock certificates.

•Some investors are more comfortable with investing in corporations, due to the possibility of an eventual IPO. This can make it harder to raise financial capital.

•Franchise taxes are levied on LLCs in many states. This tax is essentially a fee the LLC pays the state for the benefit of providing limited liability. This tax can be based on revenue, profits, the number of owners, the amount of capital employed in the state, or some combination of these.

•LLCs are considered to be taxable entities in the District of Columbia, which eliminates the benefits associated with pass-through taxation.

•In some states, renewal or annual fees may be higher than corporations.

•Creditors have been known to require members of LLCs to personally sign for and guarantee debts of the LLC, which obviously makes to owners personally responsible for the debt.
Variations

•A Series LLC is a special and uncommon type of LLC. It allows a single LLC to segregate its assets into separate series.

•A Professional Limited Liability Company, also known as a PLLC, P.L.L.C., or P.L., is a type of LLC that is specifically organized to perform a professional service. This will usually involve professions where the state requires a license to provide these same services, like a doctor, chiropractor, lawyer, accountant, architect, or engineer. Some states do not allow an LLC to participate in the practice of a licensed professional.

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What Happens During Probate

Probate is the court process that determines whether your will is legally valid. The probate court is also where your estate is officially distributed to your creditors and the beneficiaries under your will. Depending on the value and complexity of your estate, the probate process can take several months .... or it may be eligible for a simplified process.

Living Trust Definition - What is a Living Trust?

The best living trust definition is a written legal document which substitutes for a will as your primary estate planning vehicle. When you have a trust you transfer your assets such as your home, financial accounts and personal property to the trust. In addition you change the beneficiary or contingent beneficiary of retirement accounts and life insurance to the trust. These assets are then administered for your benefit during your lifetime, and either continue to be held or transferred to your beneficiaries when you die.

The creator, also called the grantor, of the trust usually names him or herself as the initial trustee in charge of managing the assets. This allows the grantor to remain in control of the assets during his or her lifetime. For all practical purposes under this living trust definition, nothing changes in the way the grantor manages or controls the assets after they are put in trust. The only difference is the named owner.

A successor trustee is named in the document, usually a family member or friend but sometimes an institution such as a bank or trust company. This successor trustee then will manage the trust assets for benefit of the grantor if the grantor becomes disabled and for the contingent beneficiaries after the grantor dies.

This living trust definition is for the revocable living trust. It is also sometimes referred to as a revocable inter vivos or a grantor trust. It may be revoked or amended at any time by the grantors as long as they are still competent.

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Conservatorship Information

A conservatorship is a court proceeding that grants one or more people the authority to make financial or health care decisions for another because of a mental or physical incapacity that renders a person unable to make informed and sound decisions.

A conservatorship can be over the person, the estate, or both. The person appointed by the court to make decisions is called the conservator, and the person about whom decisions will be made is called the conservatee.

Conservators are generally family members or a professional conservatorship company and in some cases, the Public Guardian's office may be appointed. Regardless of who the conservator is, their duty is to act solely in the best interests of the conservatee. To insure this, court evaluation, supervision and monitoring of the conservatorship is established.

Should You Put Your Rental Property Into Your Living Trust or LLC?

Should you put your rental property into your living trust or LLC?